Crypto Market's Next Surge to Differ from Past Booms, Experts Weigh in With Mixed Predictions
Summary:
The forthcoming cryptocurrency surge will not resemble previous booms, and investors need to adjust their expectations, asserts Concordium Blockchain founder Lars Seier Christensen. In contrast to the largely hopeful outlook surrounding Bitcoin exchange-traded funds (ETFs), Christensen doubts their approval will significantly shift crypto markets. His prediction for the industry is a gradual, modest growth rather than a sudden asset price surge. While his views are met with disagreement from others, such as Ben Simpson from Collective Shift who believes the next bull market will buoy Bitcoin and Ether, caution is advised by analysts like Tina Teng from CMC Markets due to impending economic uncertainties.
The imminent cryptocurrency upswing won't mirror previous ones, urging investors to moderate their anticipations of a sudden crypto price surge, says Lars Seier Christensen, founder of Concordium enterprise blockchain, during a recent chat with Cointelegraph. While many are eagerly awaiting the inflow of proposed Bitcoin (BTC) exchange-traded funds with hopeful eyes, Christensen doubts their endorsement will inspire an instant significant shift in crypto markets. He warns that even a Bitcoin rally will not necessarily stimulate a comparable boom in all cryptocurrencies. He specifically voices skepticism on common altcoins and Ethereum riding the possible Bitcoin wave, asserting this is unlikely to happen. Key dates to look out for are the mid-October days, most notably October 16.
Over the last year and a half, digital asset values have dwindled but the interest in blockchain technology in the corporate sector continues to grow steadily. Therefore, the next big leap in the industry will likely be indicated by a gradual, more modest growth over about the next year and a half, not a rapid price increase of crypto assets like it happened in 2021. In his words, corporations would only need a crypto asset when necessary to perform certain actions on a specific blockchain, implying no urgent need for a significant value increase in any crypto.
Christensen's views are not universally agreed upon. Ben Simpson, the founder of Collective Shift, a crypto education platform, points towards extensive data that suggest the Bitcoin bull market's initial stages have already begun. According to him, charts drawing down from All-Time High and the Market Value to Realized Value Ratio (MVRV) suggest accumulation nearing its culmination, a precursor to a bull market. Simpson foresees the next bull market will buoy Bitcoin, Ether (ETH), and tokens specific to applications and sectors like gaming.
The crypto industry has had a challenging two years, with an increasingly vigilant federal reserve and major setbacks including collapses of notable platforms like FTX and Celsius Network. These factors have lessened the industry's investment and, in turn, the prices of crypto assets. However, the U.S. Federal Reserve took a break from hiking interest rates earlier this week, which left eToro Markets analyst Josh Gilbert with a positive outlook.
In Gilbert's view, the system is stabilizing with an anticipation of rate cuts from global central banks. As rates decrease and inflation slows down, investors are likely to accept more risk and inject more capital into financial markets, with crypto leading the charge. Gilbert's forecast for next year is a rally. The centerpiece for optimism, he cites, is the upcoming Bitcoin halving.
However, Tina Teng, a market analyst from CMC Markets, counsels caution on dreaming of massive gains prematurely. Investors should prepare for fresh uncertainty waves ahead. It is premature to state the start of a cryptocurrency bull market with any certainty, as this would depend on the macro environment. “Further rate hike pauses from central banks to provide enough market liquidity would affect this", adds Teng. She attributes the recent riskier asset class slides — startups, small caps, and cryptocurrencies — to tightening monetary policy. Historically, the boom in the cryptocurrency market has coincided with the Fed's rate cut cycle rather than a hike one. Marked increases in government bond yields and flashing warning signals for upcoming economic uncertainty call for caution.
For the impending bull market conjecture to pass the test, Teng says Bitcoin should smash through the 50-day moving average and seize another upward momentum opportunity.
Published At
9/22/2023 5:31:41 AM
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